Venezuela: weapons against the economic war

July 2, 2018 00:30

Bolstered by his election victory in May, Nicolás Maduro’s Bolivarian government is intensifying its fight against economic sabotage orchestrated by Washington. These are some of the measures that allowed him to triumph at the ballot box.

Interview and photos: Marcos Ortiz F.

The unexpected tranquillity that greeted hundreds of international observers, arriving in Caracas to monitor the last elections on 20 May, surprised even the fiercest defenders of Nicolás Maduro’s government.

Journalistic accounts that reached the rest of the world suggested that Venezuela was a country in ruins, yet in reality, this was not the case. Caracas was no Damascus, as was suggested by leading European and South American newspapers.

Over the 30-minute car journey from Maiquetía International Airport to the centre of the capital, life could be seen continuing as normal: families headed to the beaches of La Guaira, many posters promoting the three main presidential candidates could be seen, and there were long lines of traffic full of people travelling to their jobs and educational centres.

“Upon arrival, I noticed that the situation was entirely calm, peaceful. I was especially interested to see the candidates’ propaganda. Everywhere, I saw huge posters of Henri Falcón, of Bertucci and, of course, a staggering number of posters of Maduro”. On returning to his house in London, Chilean lecturer Francisco Domínguez recalled his first experience as an international observer.

“What drew my attention was that in contrast to, quote unquote, civilised countries like Great Britain, none of the posters were vandalised”, said Domínguez, Head of the Centre for Latin American Studies at Middlesex University and National Secretary of the Venezuela Solidarity Campaign.

Francisco Dominguez

Remembering Allende’s Chile

Venezuela, prey to an economic crisis which has manifested itself through hyperinflation, an absence of paper currency and a shortage of some basic commodities and medicines, re-elected Nicolás Maduro with an overwhelming 68% of the votes.

In a result that was difficult for the rest of the world to understand, over 6.2 million Venezuelans decided to continue the Bolivarian Revolution started by Hugo Chávez, supporting the idea that it is the “economic war”, driven by Washington in particular, that is to blame for the complicated times that the population is experiencing. “The economy is facing serious difficulties”, says Dominguez. “It is being subjected to a harsh economic war, much harsher than the one that was waged against Salvador Allende”.

Having lived in Chile from the beginning of the 1970s, Domínguez talks about the subject with experience. “In Chile, with the Supply and Prices Committees we successfully caught anyone that was hoarding. When we caught them and found, for example, 50 kilos of sugar, we would take the sugar and sell it to the local people immediately – 50 kilos of sugar was not an insignificant amount”, the academic said.

The Venezuelan economic war, however, runs deeper than what happened in Chile, where the economic war gave rise to Pinochet’s coup d’état in 1973. “Venezuela has good systems in place to defend itself, but the intensity and extent of this economic aggression is much greater. Not only do we have hoarding and unbelievable surcharges, we also have a mass flow of contraband to Colombia and currency speculation due to the exchange rate which has been applied”.

The situation has also been aggravated by economic sanctions encouraged by Washington that seek to further strangle Caracas’s already badly damaged economy. Domínguez says that this explains the inflation that has resulted in Venezuelans walking around with fat wads of banknotes that are useless and worth nothing.

The CLAPs and productive infrastructure

This reality has motivated Maduro’s government to create Local Supply and Production Committees (CLAPs by its Spanish acronym), an initiative for parallel distribution which, once or twice a month, provides for 6 million families.

Created two years ago, CLAPs were considered to be a temporary measure. “Once they allow the economy to settle, they will become unnecessary because everything will return to normal”, Domínguez says of the measure that means that the sight of Venezuelans walking home, carrying bags or boxes with basic foodstuffs and toiletries amongst other products, is not unusual.

“I believe that Maduro is attempting to create an alternative distribution system to the current private-sector dominated system. Or, at the very least, he wants to make the alternative system vital enough so that those who control the private sector become insignificant, so there will be no negative consequences if they cause trouble”, he explains.

“I am also an economist, and I suspect that, with the changes to the country’s productive infrastructure and the diversification of the economy, we are truly going to see an improvement. But this means that Venezuela will have to survive with relatively high inflation for a while”, he added. But is it truly possible to stop depending on oil revenue? The eternal promise of the Venezuelan ruling class has been repeated for decades. “In such a globalised economy, like the one we currently have, to be able to diversify will require the development of those areas where Venezuela has comparative advantages”, says Domínguez. In other words, this means promoting those sectors in which the Chinese economy is not a competitive rival.

“Probably areas such as chocolate and rum production, we also have gold, we have petrol and coltan. In these areas, it is possible that Venezuela will be able to develop and diversify”, says Domínguez, taking up the Venezuelan cause as if it were his own.

“If Venezuela manages to become self-sufficient in agricultural products at 70 -80%, the remainder of the problems are small. The evidence is in Venezuela’s economic activity, over 2 million houses have been built in recent years. The production potential exists, the problem is that it is badly structured”.

National ID Cards

Criticised by the opposition, but currently benefiting over half the population, the National ID Card is another tool devised by the Maduro government to tackle economic instability.

“Its specific primary function is to know exactly who everyone is, and the rights they have”, explains Domínguez. Equipped with a QR code, the card has allowed food vouchers and earnings to be transferred directly, avoiding bureaucratic formalities that result in corruption or delays.

“As part of the economic aggression consists of hiding banknotes in industrial quantities, being able to trade with a type of credit card, onto which salaries and earnings can be transferred, really makes things easier, and avoids creating a bottleneck in the economy. People don’t really have cash”, he adds.

Petro

Another solution in fighting the economic war is the Petro, the world’s first cryptocurrency to be created by a state and the first to be backed, in this case, by oil barrels. Throughout the electoral period, Petro rose up as a beacon of hope among the electorate.

“Petro has allowed us many things, it is a clever measure. It is something that nobody has done before, so no-one knows how to manage it. Venezuelans are learning, and at this moment, other countries have followed suit. China, Russia and Iran have their own cryptocurrencies. This means that Venezuela does not in fact need to obtain hard currency in the form of dollars to trade. This truly makes things a lot easier”, concludes Domínguez.